RARE JAPANESE LABOR WIN PROMPTS NEW FEARS

Voluntary overtime may become a thing of the past, as companies such as Toyota and McDonalds start paying employees for extra work

Its not easy being a worker in Japan. In big cities such as Tokyo or Osaka, salarymen still start the day early, work long into the evening, and are then expected to socialize with section chiefs. The pay of factory workers, faced with low-cost competition from China and other Asian countries, has barely budged in a decade even at the most successful companies. And years of restructuring spurred by Japans long economic downturn mean many workers have fewer rights and lower earnings than the previous generation (BusinessWeek.com, 5/28/07). Its not easy being a worker in Japan. In big cities such as Tokyo or Osaka, salarymen still start the day early, work long into the evening, and are then expected to socialize with section chiefs. The pay of factory workers, faced with low-cost competition from China and other Asian countries, has barely budged in a decade even at the most successful companies. And years of restructuring spurred by Japans long economic downturn mean many workers have fewer rights and lower earnings than the previous generation (BusinessWeek.com, 5/28/07).
Its perhaps no surprise, then, that a survey by the Japan Productivity Center for Social-Economic Development last summer found that 80% of employees said they would cancel a date if asked by a superior to do overtime.
As depressing as all that seems, hard-pressed Japanese workers are finally making progress in their fight against one bugbear: uncompensated voluntary overtime, a practice which in some cases involves already busy employees working an extra 80 hours or more free of charge every month. Toyota (TM) and McDonalds (MCD) are among a growing group of companies taking the lead in reforming their overtime policies.
Faltering Growth in Export Markets
While getting paid for all hours worked is a tonic for employees, the moves are causing anxiety. Analysts are concerned that the changes could hurt businesses at a time when the Japanese economy is slowing and inflation is rising. At the same time, Corporate Japan is worrying about faltering growth in the U.S. and other important export markets.
Starting this month, Toyota will begin paying 40,000 factory workers for participating in quality control programs outside normal hours that until now were supposedly voluntary. The decision follows a Nagoya court ruling concerning a 30-year-old Toyota employee who died suddenly in 2002 after conducting more than 100 hours a month of unpaid quality control work in addition to paid duties.
The court disagreed with the Labor Standard Supervision Office in Toyoda City, Toyotas hometown, which had said the family of the deceased wasnt eligible for compensation because the quality control work was voluntary. This is something that workers have been trying to change for decades, says Tadao Wakatsuki, chairman of the All Toyota Labor Union, a small but vocal union of the automakers workers. It shows that times have changed.
A Court Decision Changes Everything
In another high-profile move, McDonalds Holdings, Japans largest fast-food restaurant chain, said in May that it will begin paying its store managers for overtime. Like that of Toyota, the McDonalds decision followed a court ruling. In January, the Tokyo District Court deemed the company was guilty of creating phony management positions to avoid paying employees overtime (BusinessWeek.com, 1/29/08).
Under Japanese labor law, companies dont have to pay supervisors and managers overtime. The court found that many of McDonalds managers had few management responsibilities, and while the company initially appealed the decision, ensuing bad publicity appears to have forced the change of policy.